World Gold Council Report

Context:

According to the World Gold Council's report released on February 7, 2025, India’s gold investments surged by 60% in 2024, reaching a staggering Rs 1.5 lakh crore. This surge is largely due to strong demand in India and China, which offset slowdowns in Europe and the US. Here are the key highlights of the report:

Highlights:

1. Global Demand Growth:

• Global gold demand increased by 25% in 2023.
• Investment demand for gold rose by 29% in the same period.

1. Global Supply:

• The global supply of gold grew by 1%, driven mainly by mine production and recycling.

1. Outlook for 2025:

• Central banks and Gold Exchange-Traded Funds (ETFs) are expected to drive demand for gold in 2025.

1. India’s Gold Reserves:

• The Reserve Bank of India (RBI) added 73 tonnes of gold to its forex reserves, increasing gold’s share in the reserves to a record 11%.

Reasons for Increased Gold Demand in India:

1. Symbol of Wealth and Status:

• Gold has long been a symbol of wealth and status, particularly in Indian culture, where it plays an essential role in rituals and traditions. For example, it is sacred in Hindu and Jain traditions.

1. Investment and Security:

• Gold is highly valued for its portability, making it an attractive investment, especially in rural areas where access to other forms of investment may be limited.

1. Wedding Purchases:

• Around 50% of India’s annual gold demand comes from wedding-related purchases, reflecting the cultural importance of gold in matrimonial ceremonies.

Gold Resources:

• India has substantial gold ore resources, with Bihar holding the largest share (44%), followed by Rajasthan (25%), Karnataka (21%), and smaller shares in West Bengal, Andhra Pradesh, and Jharkhand.
• Globally, the top holders of gold reserves include countries such as USA, Germany, Italy, France, China, Switzerland, and India.

World Gold Council (WGC):

• Founded in 1987 by leading gold mining companies, the WGC’s main objective is to promote gold as a strategic asset and ensure a responsible and transparent gold supply chain.
• The organization operates in 45+ countries and is headquartered in London, UK.

Top Gold Exporters:

• The top exporters of gold include Germany, European Union, Switzerland, United States, and Japan.

The surge in gold investments in India reflects the strong cultural, financial, and social importance of gold in the country. The global rise in demand, driven by both retail and institutional buyers, along with India’s robust investment in its gold reserves, underscores the growing strategic role of gold in financial markets worldwide. The World Gold Council continues to advocate for gold’s role in creating a more secure and diversified investment portfolio.